After nearly a week of discussion, the City of DeLand has set a preliminary millage rate of 6.92 for the 2021-22 fiscal year. Next year’s budget is up some $25 million over last year’s.

Increased wages, money for new hires, and a slew of capital projects are driving the higher budget for the upcoming fiscal year.

Millage rate: The amount owed per $1,000 of taxable property value

The preliminary budget for the 2021-22 fiscal year is $110.5 million. This is an increase of some $25 million over last year’s budget of $85.4 million.

To get the millage to 6.92, the city will need to find $135,000 to cut. But even though they voted to start at 6.92 mills, several members of the City Commission expressed their desire to go even lower, as close as possible to the current millage of 6.7841. To get there, the city would need to slice some $435,000 from the budget.

A millage rate of 6.92 would mean property owners will pay approximately $6.92 in City of DeLand taxes for every $1,000 of taxable property value. The owner of a home with a taxable value of $200,000 after any exemptions, for example, would pay $1,384 in city property taxes, along with property taxes imposed by the county, School Board, Hospital Authority, etc.

That same property owner would pay about $1,304 at the rolled-back rate, which is the rate that would give the city the same income as it had last year from property taxes, not counting taxes on new construction or annexations.

So what’s in the budget?

Tense Vote

At the conclusion of the City of DeLand budget hearings July 15, it seemed like the course was clear: Set a proposed millage of 6.9841, and adjust that rate downward over the coming months, before making it final in September.

But when City Commissioner Charles Paiva made a motion to approve the 6.9841 millage rate at the City Commission meeting July 19, the dais fell silent.

“Do I hear a second?” Mayor Bob Apgar asked the rest of the City Commission.

He did not hear a second.

The millage must be advertised before the public hearing in September when the budget is adopted. Millage can be adjusted down from the advertised rate, but it cannot be increased without advertising the tax rate again.

With no seconds, Apgar seconded the motion himself. However, discussion began.

Multiple city commissioners, including Paiva, expressed concern about advertising a millage as high as 6.9841, even if it was unlikely the final millage would be that high. After some discussion, Paiva rescinded his motion.

Paiva then moved to adopt a millage rate of 6.92. That motion quickly received a second from City Commissioner Kevin Reid.

At its final vote — called by a visibly annoyed Apgar — the proposed millage was approved 4-1 vote, with City Commissioner Chris Cloudman dissenting.

Cloudman said he would not agree to the higher millage rate come September and still wants to see the millage stay at its current rate of 6.7841.

Since the City Commission did not identify any specific line items to cut to make it possible to reduce the millage from 6.9841 to 6.7841, city staff will begin the process.

To get the rate to 6.92, the staff must identify $135,000 to trim from the budget. To get it back to this year’s rate of 6.7841, a total of $435,000 will have to be cut.

Either way, the city will have to advertise its millage rate as a tax increase. The rolled-back rate, which would produce the same income as last year’s rate (not counting annexations and new construction) is 6.52, and all the proposals so far exceed that rate.

Cash money

One big driver of the budget is raising the minimum wage for city employees to $15 and giving other employees salary increases. The minimum-wage hike is a big-ticket item, City Manager Michael Pleus told the City Commission, costing approximately $2 million of the $110 million budget.

The city’s new minimum wage was inspired by voter approval of a minimum wage of $15 for the state of Florida. DeLand decided to get a jump on the increase, which will not take full effect statewide until 2026.

“That was an extremely expensive item, it was a voter-approved item, so we all felt like it was something we had to do,” Pleus said. “Companies throughout the region are increasing to $15 an hour. It was a move we felt like we had to do, and I stand by that decision you made. I think it was the right call.”

The city was given the go-ahead to begin advertising vacant positions at the new pay rate before the budget was approved by the City Commission, and Parks and Recreation Director Rick Hall said he has already seen positive results.

“We had two ‘Maintenance I’ positions open for the last seven months,” Hall said. “This last week, when it got advertised with the new salary rate, we probably had more applications this week than we did the last seven months.”

Another nearly $900,000 worth of spending comes from new personnel. The city is looking to fill 13.81 positions (the decimal accounting for part-time positions).

The new hires are to include two new police officers, a community-information specialist for the Public Safety Department, and a fire inspector. This figure also accounts for the hiring of five new firefighters, which city officials hope to pay for with grant money from the Federal Emergency Management Agency.

It will not become clear whether the $350,000 SAFER grant will be awarded to the city until September, however, and, as Pleus explained, that won’t cut it for budget purposes.

“If we don’t get that grant, he’s still going to need those firefighters,” Pleus said.

These new firefighters are partly necessary, Fire Chief Todd Allen said, to stay ahead of the city’s growing population. Allen is also eyeing improvements for the fire station on the city’s southeast side, Station 83.

“What we’re looking at at Station 83 is just staying ahead of the growth in that area,” Allen said. “We know the calls are coming. They’re starting to increase out there.”

One specific area of concern is the future site of Cresswind, an age-55-and-up community planned for the east side of Lake Winnemissett. Other areas of concern include the intersection of West Beresford Road and South Spring Garden Avenue, where two housing developments with a total of nearly 300 homes may soon be.

Where’s the dough going?

General-fund spending rose 28.19 percent from this year to next year, according to the proposed budget. General-fund increases are largely driven by new personnel and higher wages. The general fund includes the DeLand Police Department, the DeLand Fire Department, Public Works, and the Parks and Recreation Department, in addition to general city administration.

Spending in all of these departments is up due to a number of factors, including personnel costs and operating costs.

Water-and-sewage spending is set to rise 56.94 percent in the next fiscal year, with much of the increase due to the need for a new utilities facility.

“The City’s Utility Department has grown to become a large enterprise which has outgrown its existing facilities,” City Manager Michael Pleus wrote in the budget documents.

The Utilities Department, like the DeLand Municipal Airport and other city operations, is an enterprise fund. An enterprise fund brings in its own revenue, instead of being covered in the general fund and paid for mostly by taxation.

Capital spending is up 180 percent, but this is covered by existing funds and not property taxes, Pleus told The Beacon. This spending includes new vehicles for several departments and other capital improvements.

Municipal Airport spending — aside from capital projects — is projected to be down 66 percent.

Stormwater spending is up 40 percent, largely due to higher operating costs and higher wages.

A more detailed breakdown can be pictured in the diagram below.

It isn’t just the DeLand Fire Department trying to grow as the entire city grows.

The DeLand Police Department is asking for two new officers next year, and, per Police Chief Jason Umberger, intends to ask for two more officers each year for the next five for a total of 10 new officers in the coming years.

A good chunk of spending is also coming from the city’s utilities. The current budget allocates more than $40 million for water-and-sewage spending.

Of that $40 million, funds are set aside for wastewater pump and well improvements, as well as a new utilities administration building, which will carry a price tag of roughly $10 million.

Parks and Recreation Director Hall also noted that, as the population grows, so too will spending.

“With our growth, with how people are viewing the city of DeLand and wanting to move here, regardless of whether it’s parks and recreation, public works, fire, police, we have to provide a service that’s going to meet the demand of the increasing population,” Hall said. “That’s probably our biggest challenge, as well as police, fire and everybody else.”

The city’s revenue is up somewhat due to new construction, but not enough to allow a budget built on the rolled-back rate, which would produce the same income as last year. New construction and annexation revenue produced some $89.5 million. Overall, revenue was up 8.24 percent, or $173.7 million.

The city is also planning capital expenditures like improvements to Melching Field — which Stetson University is covering half the cost of — fixing up Stone Street, and replacing a number of vehicles like the ones used by the Public Works Department. One bucket truck, for example, is struggling to lift individuals who weigh more than 160 pounds, according to city staff.

Capital expenditures, a line item totaling some $2.6 million, will be covered by set-aside capital funds and other funds.

With a preliminary budget settled on, the city moves on to the next step: trimming the fat to lower the property-tax impacts on DeLandites. But with capital projects covered by reserve funds, City Manager Pleus acknowledged, it may be difficult to trim money from other areas of the budget, unless the city wants to hold off on hiring personnel.

The budget now returns to city staff, who will tweak line item after line item to reach the levels set by the City Commission. Members of the public will see the budget next when it returns for public hearings in September.